Gary Lauer, chief executive officer of eHealth, stated, "We are pleased with our first quarter performance highlighted by revenue growth of 17%, the second consecutive quarter of commission revenue growth in our Individual & Family plan business, and meaningful Medicare business revenue contribution."

First Quarter 2013 Results

Revenue -- Revenue for the first quarter of 2013 totaled $43.2 million, a 17% increase compared to revenue of $37.1 million for the first quarter of 2012. Commission revenue for the first quarter of 2013 totaled $38.3 million, a 22% increase compared to commission revenue of $31.5 million for the first quarter of 2012. Medicare revenue was $10.1 million for the first quarter of 2013, a 57% increase compared to Medicare revenue of $6.5 million for the first quarter of 2012.

Submitted Applications -- Submitted applications for individual and family products increased 10% in the first quarter of 2013 to 126,900 applications, compared to 115,400 applications in the first quarter of 2012.

Membership -- Total estimated membership at March 31, 2013 was 1,053,800 members, a 24% increase over estimated membership of 848,600 at March 31, 2012. Estimated individual and family plan membership was 738,900, an 8% increase over estimated membership of 686,800 at March 31, 2012. Estimated Medicare membership was 75,300, a 114% increase over estimated membership of 35,200 at March 31, 2012. Total approved members, including individual and family plan, Medicare plan and other product members, increased 36% to 206,600 members in the first quarter of 2013, compared to 151,900 in the first quarter of 2012.

Income from Operations -- Operating income was $3.9 million for both the first quarters of 2013 and 2012. Operating margins were 9% and 11% in the first quarters of 2013 and 2012, respectively. Non-GAAP operating income for the first quarter of 2013 was $5.9 million, compared to $6.0 million for the first quarter of 2012. Non-GAAP operating margins were 14% and 16% in the first quarters of 2013 and 2012, respectively. Non-GAAP operating income and margins in each of the first quarters of 2013 and 2012 exclude $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense.

EBITDA -- EBITDA was $6.6 million for both the first quarters of 2013 and 2012. EBITDA is calculated by adding stock-based compensation, depreciation and amortization expense, including intangible asset amortization expense, other (income) expense, net and provision for income taxes to GAAP net income.

Pre-tax Income -- Pre-tax income was $3.9 million for both the first quarters of 2013 and 2012.

Net Income -- Net income for the first quarter of 2013 was $2.4 million, or $0.11 per diluted share, compared to net income of $2.1 million, or $0.10 per diluted share for the first quarter of 2012. Non-GAAP net income for the first quarter of 2013 was $3.6 million, or $0.17 per diluted share, compared to non-GAAP net income of $3.5 million, or $0.17 per diluted share for the first quarter of 2012. Non-GAAP net income and non-GAAP net income per diluted share in the first quarter of 2013 exclude $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense, less $0.8 million for related income tax benefit. Non-GAAP net income and non-GAAP net income per diluted share in the first quarter of 2012 exclude $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense, less $0.7 million for related income tax benefit.

Cash Flows and Cash Balance -- Cash flow from operations was an outflow of $538,000 compared to an inflow from operations of $5.1 million in the first quarter of 2012. First quarter 2013 operating cash flow included a $3.5 million tax benefit that was generated from stock option exercises during the quarter. This benefit negatively impacted cash flow from operations and positively impacted cash flow from financing activities in the first quarter. This benefit is expected to positively impact operating cash flow later this year by an equal offsetting amount to the first quarter negative impact on operating cash flow as it is used to reduce actual cash taxes paid.

Cash and cash equivalents as of March 31, 2013 totaled $113.6 million, compared to $140.8 million as of December 31, 2012. The decrease in cash and cash equivalents reflects $29.0 million of cash used to repurchase 1.6 million shares of our common stock in the first quarter of 2013 as part of our current stock repurchase program. In the fourth quarter of 2012, eHealth announced a $30 million share repurchase program, which was increased to $60 million in the first quarter of 2013.

2013 Guidance

eHealth is reaffirming guidance for the full year ending December 31, 2013 based on information available as of April 25, 2013. These expectations are forward-looking statements and eHealth assumes no obligation to update these statements. Results may be materially different and are affected by the risk factors and uncertainties identified in this release and in eHealth's annual and quarterly filings with the Securities and Exchange Commission.

Total revenue is expected to be in the range of $168 million to $174 million

Stock-based compensation expense is expected to be in the range of $6.0 million to $7.5 million

EBITDA* is expected to be in the range of $23 million to $29 million

Non-GAAP net income per diluted share** is expected to be in the range of $0.61 to $0.71 per share

Webcast and Conference Call Information
A Webcast and conference call will be held today, Thursday, April 25, 2013 at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time. The Webcast will be available live on the Investor Relations section on eHealth's website at http://ir.ehealthinsurance.com. Individuals interested in listening to the conference call may do so by dialing 800-891-5314 for domestic callers and 847-413-3618 for international callers. The participant passcode is 34677043. A telephone replay will be available two hours following the conclusion of the call for a period of 30 days and can be accessed by dialing 888-843-7419 for domestic callers and 630-652-3042 for international callers. The call ID for the replay is 34677043. The live and archived webcast of the call will also be available on eHealth's website at http://www.ehealthinsurance.com under the Investor Relations section.

About eHealth, Inc.eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, America's first and largest private health insurance exchange where individuals, families and small businesses can compare health insurance products from leading insurers side by side and purchase and enroll in coverage online. eHealthInsurance offers thousands of individual, family and small business health plans underwritten by more than 180 of the nation's leading health insurance companies. eHealthInsurance is licensed to sell health insurance in all 50 states and the District of Columbia. Through the company's eHealthTechnology solution (www.eHealthTechnology.com), eHealth is also a leading provider of health insurance exchange technology. eHealthTechnology's exchange platform provides a suite of hosted e-commerce solutions that enable health plan providers, resellers and government entities to market and distribute products online. eHealth, Inc. also provides powerful online and pharmacy-based tools to help seniors navigate Medicare health insurance options, choose the right plan and enroll in select plans online through its wholly-owned subsidiary, PlanPrescriber.com (www.planprescriber.com) and through its Medicare website www.eHealthMedicare.com.

Forward-Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding future events, our future performance, guidance for total revenue, stock-based compensation expense, EBITDA, non-GAAP net income per diluted share for the year ending December 31, 2013, the estimated tax benefits relating to stock-based compensation and intangible asset amortization expenses, the utility to our investors of the non-GAAP financial measures presented is this release and the impact of a tax benefit on our future operating cash flows. These forward-looking statements are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the statements made, including risks associated with the impact of healthcare reform and medical loss ratio requirements; eHealth's ability to maintain its relationship with health insurance carriers; eHealth's ability to enter into relationships with new health insurance carriers, particularly with respect to the sale of Medicare-related products; eHealth's success in marketing and selling Medicare-related health insurance plans; eHealth's ability to hire, train and retain licensed health insurance agents for its Medicare business; the need for health insurance carrier and regulatory approvals in connection with the marketing of Medicare-related insurance products; government disapproval of our use of marketing material, including call center scripts and our websites, to sell Medicare-related health insurance products; costs of acquiring new members; weak economic conditions; consumer awareness of the availability and accessibility of affordable health insurance; changes in member conversion rates; lack of membership growth and retention rates; changes in products offered on eHealth's ecommerce platform; changes in commission rates or carrier underwriting practices; maintaining and enhancing eHealth's brand identity; system failures, capacity constraints, data loss or online commerce security risks; dependence on acceptance of the Internet as a marketplace for the purchase and sale of health insurance; dependence upon Internet search engines; reliance on marketing partners; timing of receipt and accuracy of commission reports; payment practices of health insurance carriers; competition; our operations in China; success of eHealth's sponsorship and advertising business; the licensing of the use of eHealth's technology or our performance of services pursuant to government contracts; protection of intellectual property and defense of intellectual property rights claims; legal liability, regulatory penalties and negative publicity; changes in our management and key employees; management of business expansion and diversification; seasonality; impact of acquisitions, including risks associated with not realizing anticipated synergies and opportunities with respect to PlanPrescriber, Inc.; underperformance by PlanPrescriber, Inc.; PlanPrescriber's maintenance of its relationships with its pharmacy and other relationships that serve as a source of Medicare-related leads; maintenance of proper and effective internal controls; impact of provisions for income taxes; changes in laws and regulations, including in connection with healthcare reform and/or with respect to the marketing and sale of Medicare plans; compliance with insurance and other laws and regulations; exposure to security risks; and the performance, reliability and availability of eHealth's ecommerce platform and underlying network infrastructure. Other factors that could cause operating, financial and other results to differ are described in eHealth's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on the investor relations page of eHealth's website at http://www.ehealthinsurance.com and on the Securities and Exchange Commission's website at www.sec.gov. eHealth does not undertake any obligation to update any forward-looking statement to conform the statement to actual results or changes in expectations.

Non-GAAP Financial Information

This press release includes financial measures that are not in accordance with generally accepted accounting principles in the United States (GAAP). To supplement eHealth's condensed consolidated financial statements presented in accordance with GAAP, eHealth presents investors with certain non-GAAP financial measures, including non-GAAP operating income; non-GAAP operating margins; earnings before interest, taxes, depreciation and amortization (EBITDA); non-GAAP net income and non-GAAP net income per diluted share.

Non-GAAP net income per diluted share is calculated by dividing non-GAAP net income by GAAP weighted average diluted shares outstanding.

eHealth believes that the presentation of these non-GAAP financial measures provide important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with the Company's past financial reports. Management also believes that the exclusion of the items described above provides an additional measure of the Company's operating results and facilitates comparisons of the Company's core operating performance against prior periods and business model objectives. This information is provided to investors in order to facilitate additional analyses of past, present and future operating performance and as a supplemental means to evaluate the Company's ongoing operations. Externally, the Company believes that these non-GAAP financial measures are useful to investors in their assessment of the Company's operating performance.

Non-GAAP operating income, non-GAAP operating margins, EBITDA, non-GAAP net income and non-GAAP net income per diluted share are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures used in this press release have limitations in that they do not reflect all of the revenue and costs associated with the operations of the Company's business and do not reflect income tax as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of eHealth's results as reported under GAAP. The Company expects to continue to incur the stock-based compensation costs and purchased intangible asset amortization costs described above, and exclusion of these costs, and their related income tax benefits, from non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. The Company compensates for these limitations by prominently disclosing GAAP operating income, GAAP operating margins, GAAP net income and GAAP net income per diluted share and providing investors with reconciliations from the Company's GAAP operating results to the non-GAAP financial measures for the relevant periods.

The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures.

EHEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

December 31, 2012

March 31, 2013

Assets

(1)

(unaudited)

Current assets:

Cash and cash equivalents

$

140,849

$

113,610

Accounts receivable

4,468

7,364

Deferred income taxes

4,098

6,204

Prepaid expenses and other current assets

6,643

5,636

Total current assets

156,058

132,814

Property and equipment, net

6,185

7,082

Deferred income taxes

2,928

4,018

Other assets

8,123

6,467

Intangible assets, net

8,911

8,557

Goodwill

14,096

14,096

Total assets

$

196,301

$

173,034

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

6,123

$

4,528

Accrued compensation and benefits

8,244

6,633

Accrued marketing expenses

3,941

4,050

Deferred revenue

926

1,358

Other current liabilities

1,575

1,831

Total current liabilities

20,809

18,400

Non-current liabilities

4,625

4,922

Stockholders' equity:

Common stock

27

28

Additional paid-in capital

232,903

238,396

Treasury stock, at cost

(90,991

)

(119,998

)

Retained earnings

28,743

31,104

Accumulated other comprehensive income

185

182

Total stockholders' equity

170,867

149,712

Total liabilities and stockholders' equity

$

196,301

$

173,034

(1) The condensed consolidated balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements at that date.

Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income taxes

(184

)

(2,887

)

Depreciation and amortization

576

642

Amortization of book-of-business consideration

1,113

2,097

Amortization of intangible assets

447

354

Stock-based compensation expense

1,625

1,634

Deferred rent and other

(10

)

3

Changes in operating assets and liabilities:

Accounts receivable

1,815

(2,896

)

Prepaid expenses and other assets

(847

)

568

Accounts payable

842

(1,595

)

Accrued compensation and benefits

(2,432

)

(1,614

)

Accrued marketing expenses

(2,531

)

108

Deferred revenue

1,275

438

Other current liabilities

1,279

249

Net cash provided by (used in) operating activities

5,093

(538

)

Investing activities

Purchases of property and equipment

(203

)

(1,539

)

Book-of-business transfers

(4,373

)

-

Net cash used in investing activities

(4,576

)

(1,539

)

Financing activities

Net proceeds from exercise of common stock options

994

1,223

Cash used to net-share settle equity awards

(980

)

(820

)

Excess tax benefits from stock-based compensation

551

3,457

Repurchase of common stock

(8,441

)

(29,007

)

Principle payments in connection with capital leases

(6

)

(13

)

Net cash used in financing activities

(7,882

)

(25,160

)

Effect of exchange rate changes on cash and cash equivalents

(1

)

(2

)

Net decrease in cash and cash equivalents

(7,366

)

(27,239

)

Cash and cash equivalents at beginning of period

123,607

140,849

Cash and cash equivalents at end of period

$

116,241

$

113,610

EHEALTH, INC.
SUMMARY OF SELECTED METRICS
(Unaudited)

Key Metrics:

Three Months Ended March 31, 2012

Three Months Ended March 31, 2013

Operating cash flows (1)

$

5,093,000

$

(538,000)

IFP submitted applications (2)

115,400

126,900

IFP approved members (3)

100,500

114,400

Total approved members (4)

151,800

206,600

Commission revenue (5)

$

31,464,000

$

38,251,000

Commission revenue per estimated member for the period (6)

$

37.82

$

37.56

As of March 31, 2012

As of March 31, 2013

IFP estimated membership (7)

686,800

738,900

Medicare estimated membership (8)

35,200

75,300

Other estimated membership (9)

126,600

239,600

Total estimated membership (10)

848,600

1,053,800

Other Metrics:

Three Months Ended March 31, 2012

Three Months Ended March 31, 2013

Source of IFP submitted applications (as a percentage of total IFP applications for the period):

Direct (11)

43%

48%

Marketing partners (12)

33%

32%

Online advertising (13)

24%

20%

Total

100%

100%

Notes:

(1) Net cash provided by operating activities for the period from the condensed consolidated statements of cash flows. First quarter 2013 operating cash flow included a $3.5 million tax benefit that was generated from stock option exercises during the quarter. This benefit negatively impacted cash flow from operations and positively impacted cash flow from financing activities in the first quarter. This benefit is expected to positively impact operating cash flow later this year by an equal offsetting amount to the first quarter negative impact on operating cash flow as it is used to reduce actual cash taxes paid.

(2) IFP applications submitted on eHealth's website during the period. Applications are counted as submitted when the applicant completes the application, provides a method for payment and clicks the submit button on our website and submits the application to us. The applicant generally has additional actions to take before the application will be reviewed by the insurance carrier, such as providing additional information and providing an electronic signature. In addition, an applicant may submit more than one application. We include applications for IFP products for which we receive commissions as well as other forms of payment. We define our "IFP" offerings as major medical individual and family health insurance plans, which does not include small business, short-term major medical, stand-alone dental, life, student or Medicare-related health insurance plans.

(3) New IFP members reported to eHealth as approved during the period. Some members that are approved by a carrier do not accept the approval and therefore do not become paying members.

(4) New members for all products reported to eHealth as approved during the period. Some members that are approved by a carrier do not accept the approval and therefore do not become paying members.

(5) Commission revenue (from all sources) recognized during the period from the condensed consolidated statements of income.

(6) Calculated as commission revenue recognized during the period (see note (5) above) divided by average estimated membership for the period (calculated as beginning and ending estimated membership for all products for the period, divided by two). See our Form 10-K for the year ended December 31, 2012 - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Selected Metrics for additional information regarding our calculation of estimated membership.

(7) Estimated number of members active on IFP insurance policies as of the date indicated. See our Form 10-K for the year ended December 31, 2012 - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Selected Metrics for additional information regarding our calculation of estimated membership.

(8) Estimated number of members active on Medicare insurance policies as of the date indicated. See our Form 10-K for the year ended December 31, 2012 - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Selected Metrics for additional information regarding our calculation of estimated membership.

(9) Estimated number of members active on insurance policies other than IFP and Medicare policies as of the date indicated. See our Form 10-K for the year ended December 31, 2012 - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Selected Metrics for additional information regarding our calculation of estimated membership.

(10) Estimated number of members active on all insurance policies as of the date indicated. See our Form 10-K for the year ended December 31, 2012 - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Selected Metrics for additional information regarding our calculation of estimated membership.

(11) Percentage of IFP submitted applications from applicants who came directly to the eHealth website through algorithmic search engine results or otherwise. See note (2) above for further information as to what constitutes a submitted application.

(12) Percentage of IFP submitted applications from applicants sourced through eHealth's network of marketing partners. See note (2) above for further information as to what constitutes a submitted application.

(13) Percentage of IFP submitted applications from applicants sourced through paid search and other online advertising activities. See note (2) above for further information as to what constitutes a submitted application.

eHealth

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